Posted on 05/14/2007 11:22:44 AM PDT by MinorityRepublican
NEW YORK (CNNMoney.com) -- DaimlerChrysler moved to undo the most expensive and one of the least successful mergers in auto industry history Monday as it agreed to essentially pay to dump the money-losing Chrysler unit which it paid $37 billion for nine years ago.
DaimlerChrysler (Charts) announced it will sell an 80 percent stake in its U.S. brand to Cerberus Capital Management, a private equity investment firm that will pay $7.4 billion.
But the German automaker, which will be renamed simply Daimler, will not actually get most of the money that Cerberus is paying for the once proud automaker. Instead Cerberus will contribute $5 billion to the Chrysler auto operations it will now control, with just over another $1 billion going to Chrysler's finance arm.
While Daimler will receive the remaining $1.4 billion of Cerberus' capital contribution to the sale, Daimler expects to have to cover another $1.6 billion in Chrysler losses before the deal closes. So Daimler estimates that it will end up paying out about $650 million to close the deal, and that its earnings for 2007 will take a $4 billion to $5.4 billion profit hit due to charges related to the transaction.
(Excerpt) Read more at money.cnn.com ...
LOL!!!!......and the For Sale price is waaaay below Blue Book!......
If Dr. Z could have given us another 10 years of that brilliantly orchestrated advertising blitzkrieg, he just might have pulled this one out of the crapper.
So long Dr. Z, we hardly knew ye.
“Daimler’s Mercedes unit has had terrible quality control problems in the last few years itself.”
As I sadly found out the hard way. Transmission, to be specific.
And the transmission was one thing the Chrysler 300 got from the Mercedes line.
I wonder if the deal includes Chrysler getting Mercedes hand-me-downs?
If they made a great car and called it a Chrysler, the World would run screaming. ;)
Usual, predictable end to a “Shotgun” wedding.
Will we still get the rednecks in the beat up Duster?..........
Chrysler made more money in the last 20 years than the other two members of the Big Three.
The public doesn’t know that because for the last 9 years, Daimler has sucked off any signs of profits from Chrysler and taken them back to the fatherland.
Remember, when Daimler “merged” with Chrysler, Chrysler had over $10 billion cash on hand. That is all gone.
I know a lot of people like to bash American cars, but this is a case where Chrysler’s quality exceeded Mercedes (another fact seldom reported).
The Germans loved treating Chrysler as the bastard child of the relationship, ladling all their ills on the Americans when it was Chrysler’s profits that propped up Mercedes for most of the 9 years they were together.
Let us never forget that Daimler never allowed Chrysler to use anything from Mercedes without a charge. Daimler forced Chrysler to purchase all new equipment from European companies with ties to Daimler shareholders instead of from the best companies at the lowest cost.
Yes, it is easy to beat up Chrysler. Believe me, some of the management is completely incompetent and they are saddled with a dinosaur union. However, Chrysler has produced some of the most innovative vehicles in the last 20 years and has risen from the ashes before.
Watch Chrysler Corporation LLC rise again.
“300’s are selling well,”
I’m wondering what’s going to happen to the 300C, Charger and Magnum in their next generation, as I understand that their underpinnings (platform) are/were largely from Mercedes. And then the Crossfire was basically a Mercedes CLK underneath - I suspect it will just disappear, as it was never a great seller, anyway.
Ooooh... reeeeeeeel Corinthian leeeeeether
“I was somewhat surprised to see them depreciating so badly! I mean 2002 S series selling for under $16K?”
I’ve noticed the same thing with a number of expensive cars. Many Jaguars also seem to bleed resale value like crazy. Makes me think of buying one for my next car instead of the oh-so-sensible choice of a Honda or Toyota. You have to think, though, that those cars are so cheap for a reason. I suspect that you might find that the maintenance and servicing costs on them are very high.
Egad. I can smell that Rich Corinthian Leather from here...
In the "For Profit" world bad ideas die quickly.
In television news, aka Katie Couric, bad ideas are blamed on staff incompetence.
Well, I went into the purchase of the 'vette with both eyes wide open, knowing full well the cost of upkeep of one.
As for Jags, at least since GM bought 'em they're not the unreliable POS they were with Lucas electrics!
The Charger I drove recently was a nice car, and man...you wanna talk about FAST? Whew...
Bring back Lee Iacocca. Maybe he wants to turn Chrysler around a 2nd time? Or is the car business going the way of other manufacturing with American made cars continuing to decline in sales?
Is that what that smell is? I thought maybe it was the cheap aftershave that surely goes along with an advertising campaign that cheesy.
Well the 300M is definately the “ghetto bentley”... in the large car segment it sells pretty well.
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